With over 40 REITs and stapled trusts listed in Singapore, income-hungry investors have a plethora of options to choose from. Besides consistent distributions, REITs and stapled trusts also offer investors liquidity, exposure to the real estate market, and the ability to appreciate in value.
With that, here are the four highest yielding REITs in Singapore at the moment (data as of 4 September 2018).
1. The highest yielding REIT is Lippo Malls Indonesia Retail Trust (SGX: D5IU), with a trailing distribution yield of 10.58%. Despite its attractive trailing yield, it is worth noting that Lippo Malls Indonesia Retail Trust has not fared so well in recent times as distribution per unit slumped 29.6% in the first half of 2018. A new property tax regulation, and a weakened rupiah have impacted the trust’s bottom line and distributions, which it reports in Singapore dollars. As the tax regulations will continue to impact its bottom line in the future, it is highly unlikely that the trust will be able to sustain its current yield.
2. Second on the list is Dasin Retail Trust (SGX: CEDU) with a trailing yield of 8.95%. The trust has a portfolio of four shopping malls in the Pearl River Delta Region of China. The trust had a good start to 2018 with a 40% increase in distributable income and a 19% rise in distribution per unit. This performance was attributed to the contribution from the acquisition of Shiqi Metro Mall in June 2017. It also maintained a healthy gearing ratio of 31.5% and achieved positive rental reversion rate of 12.2%.
3. EC World Real Estate Investment Trust (SGX: BWCU) comes in at third place with a trailing yield of 8.67%. EC World REIT invests primarily in specialised logistics and eCommerce logistics buildings. It has a portfolio of six properties in Hangzhou, and made its maiden property acquisition in Wuhan. EC World REIT reported a good second quarter of 2018 as distributable income, and DPU rose 3.1% and 1.9% respectively. This results benefited from its newly acquired property in Wuhan, and organic growth in its existing portfolio.
4. Viva Industrial Trust (SGX: T8B) completes the list, with a trailing distribution yield of 8.28%. The trust, which has a portfolio of nine industrial properties in Singapore, has been in the limelight in recent weeks due to its proposed merger with ESR-REIT (SGX: J91U). Viva Industrial Trust reported growth in its second quarter results with net property income up 3.3% and distribution per security up 2.2% on year.
The Foolish bottom line
The four trusts mentioned above currently provide the highest trailing yield.
However, it is worth noting that REITs with high distribution yields do not necessarily make the best investments. As Foolish investors, we should also ensure that our investments have the capacity to grow or at the very, least sustain its distribution payout year-after-year.
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Editor's note: The article has been updated to say that Viva Industrial Trust has nine properties in its portfolio, instead of 10 as originally stated.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia owns units in EC World Real Estate Investment Trust.